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BEIJING — The Chinese miracle of the past few decades lifted more people out of poverty, and faster, than anywhere else in history. But even the spectacle of poor farmers graduating to Chevrolets could not compare to the thrill ride of China’s stock markets in the past year, which left recent university graduates counting their weekly profits in the number of new Audis they could afford – and pinching themselves at their immense good fortune.
But when it all started to fall apart, China’s fast-swelling new investor class blamed not misfortune or their own poor choices in share-picking. They instead faulted a government that had been the stock market’s cheerleader-in-chief. It was Beijing’s insistence that helped prod retirees and students alike to pour savings into stocks that then nosedived, taking with them lifetimes of accumulated wealth.
For China, then, the market crash has created not just spiralling fortunes but a crisis of trust. And as the rout deepened, people who are denied a democratic voice in their governance instead cast ballots with sell orders – making undeniably clear their dissatisfaction with the way markets, and by extension their country, has been run.
“This is a vote of no confidence by the punters,” said Willy Lam, a China expert and senior fellow at the Jamestown Foundation. “This is the most serious crisis that the Xi Jinping administration has faced.”
At its heart is rising doubt about the viability of the post-Tiananmen order, which has seen Beijing seek to propel economic reform under an unbending authoritarian regime. Plummeting share prices are a sign, Mr. Lam said, that Chinese people are saying no more.
“They have reached the limit,” he said. “And the economy cannot move forward without commensurate at least institutional reforms, if not political reforms.”
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